Developers looking to build affordable housing in Fort Worth will see changes to the city’s federal housing tax credit policy in 2024.
The goal is to reduce the impact the policy will have on the city budget and streamline processes by altering fee waivers, expanding zoning notifications and restructuring deadlines. Since 2016, 43 affordable housing projects in the city have benefited from a tax credit.
“This goes a long way in helping us meet our affordable housing shortage,” said Victor Turner, director of neighborhood services, during a City Council work session presentation.
Many of the proposed changes were discussed with developers at an Oct. 3 forum.
The state of Texas usually requires developers to set aside 10% of their affordable housing units for those whose earnings are 30% or less of the area’s median income. The city goes a step further, Turner said, by requiring developers to set aside 10% of all units for this income group.
Although some developers pushed back against this current policy, keeping it in place allows Fort Worth to get more housing units for extremely low-income residents, Turner told City Council members.
The number of units gained by the city’s policy varies by property size but on average amounts to five additional units per project, the department said in an email.
What changes are proposed for the 2024 federal housing tax credit policy?
- Reducing the eligible development application fee waiver from unlimited to only $30,000.
- Removing the waiver or reducing transportation impact fees or water/wastewater impact fees.
- Adding park dedication fee waivers to comply with state law (HB 1526).
- Adding requests for a hold harmless clause in zoning letters to comply with state law and explaining that endorsing the tax credit application does not guarantee necessary zoning changes.
- Expanding notification boundaries for neighborhood and homeowner association meetings from one-quarter mile to one-half mile. This will make it the same as zoning notifications.
- Adding quarterly deadlines for developers applying for a 4% tax credit to standardize the process and create shared expectations.
- Removing the requirement to request funding upfront from the city of Fort Worth or Fort Worth Housing Finance Corporation, due to limited availability.
- Moving the submission deadline from Jan. 13 to Jan. 6 to better meet the Feb. 13 council deadline for application approval.
The federal housing tax credit policy, followed in most large cities in Texas, helps finance the private development of affordable housing. It ensures that tax credit developments meet the local objectives of the city.
There are two types of tax credits: a 4% credit which is allocated statewide, and a 9% credit, which is allocated regionally, including Dallas and surrounding cities. Each awarded credit lasts 10 years.
Housing tax credits are among the most successful public-private partnerships to develop affordable housing since their creation in 1986.
The City Council will vote on adopting the policy at its Nov. 14 meeting.
Sandra Sadek is a Report for America corps member, covering growth for the Fort Worth Report. You can contact her at firstname.lastname@example.org or on Twitter @ssadek19.
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